Lean, Mean & Green

According to the 2016 Global Competitiveness Index, Panama ranked 42 out of 138 economies worldwide. What is the country’s strategy for continuing to improve its competitiveness?

Panama improved its position in the World Economic Forum’s ranking by an impressive eight positions. We are only nine positions away from Chile (33); overall, this has been a massive success for us. The main objective of the secretariat is for Panama to be the most competitive economy in Latin America by 2019, a position currently topped by Chile. However, it is worth mentioning that in the World Bank’s Doing Business Report, Panama lost three positions—we currently rank 70th and are the sixth Latin American economy. By 2019, we want to be in the top three in the region in terms of doing business, which is currently topped by Mexico, Colombia, Peru, and Chile. These are our objectives and my goals as National Secretary. Achieving all this will enable us to complete the Strategic Development Plan for the country that our president implemented: to grow our economy from USD40 billion to USD 68 billion by 2019. In this content, we have a competitiveness plan at the national level that we follow. Currently, our fiscal deficit is around 0.5%, and the country’s debt is just below 35%. Thus far, we have increased the per capita income of Panamanians and GDP by almost 40% since we have been in office. We have identified three main challenges to improving how business is done in Panama: a governmental bureaucracy that stifles entrepreneurs and businesses, the lack of a highly specialized workforce, and a dearth of institutionalization at several levels. The secretariat works to improve the conditions for doing business in Panama. One such project is the Panama Digital project: We want to make Panama the Silicon Valley of Latin America. We have put together joint efforts with other entities and organizations at the national level to boost the arrival and presence of tech-based companies to develop new projects and technologies here. We coordinate and facilitate this project alongside SENACYT Panama and the Panamanian Chamber of Technology. One of our main advantages is that we are part of the presidency of Panama. There are four secretariats under the presidency of the country: the Secretary of Objectives, which takes cares of the achievement of the government’s goals; the Secretary of Legal Affairs; the Secretary of Social Affairs; and the Secretary of Competitiveness. Our role is to coordinate efforts from the presidency with all involved parties in each particular project. For example, with the joint efforts in terms of the lack of highly qualified workforce, we coordinate activities with the Ministry of Labor and other such institutions. We plan during our term in office to create over 120,000 new positions and train more than 232,000 people. Additionally, we have established the country’s first technical and professional schools in the country.

What is the importance of new technical schools in the country’s efforts to increase the availability of highly qualified human resources?

Companies arriving here face a lack of technically qualified human resources in some areas. At the same time, certain companies have also raised concerns over the lack of soft skills in people. We can see the consequences of this: In most customer-facing jobs such as in the hospitality industry, we have people from other nationalities. The development of these technical schools is in response to the needs and concerns of companies operating in Panama and a means of increasing the number of expats allowed in companies and encourage foreign companies to stay in the country. There is also the Panama Bilingual project, which will allow us to have a completely bilingual primary education system by 2019. The budget for this project is about USD130 million.

What are other of the top priorities for the Competitiveness & Logistics Secretariat?

The governmental bureaucracy is far too tedious and extensive for both Panamanians and companies operating here. Therefore, one of our top priorities is the facilitation of bureaucratic processes, including the issuing of national documents and the payment of taxes. We prioritized either the revocation of certain processes or their digitalization. Our efforts in the logistics sphere have gained momentum in the most recent government, for the secretariat had another name and was more focused on the overall economy. However, we have appointed several positions within the secretariat that work solely with the logistics industry: boosting technology, increasing synergies between ministries and institutions working in the logistics industry, and so on.

How have the Panama Papers impacted the country’s image at the international level?

The Panama Papers had an impact on the way people see Panama worldwide; however, it did not affect our performance as a country in economic terms. Our government unwaveringly faced this, and we understood that only by being transparent could we reverse any negative impacts. Panama signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters with the OECD. We have boosted efforts against drug trafficking and money laundering. The signature of the above-mentioned convention with the OECD is a clear example of this.